Source · Select Committees · Environmental Audit Committee
Recommendation 21
21
Paragraph: 90
There is a risk that the net zero transition could lead to UK job and...
Conclusion
There is a risk that the net zero transition could lead to UK job and skills losses if carbon-emitting industries simply move overseas. A carbon border adjustment mechanism (CBAM), recommended in our report ‘Growing back better: putting nature and net zero at the heart of the economic recovery’, should be considered as part of measures to address this.
Paragraph Reference:
90
Government Response
Not Addressed
HM Government
Not Addressed
As we transition to net zero, it is important to ensure that the UK’s ambitious climate policy interventions do not lead to carbon leakage. The UK’s current approach to mitigating carbon leakage risk is through issuing free allowances under the UK Emissions Trading Scheme (ETS) to sectors most exposed to the risk of carbon leakage and providing energy- intensive sectors with compensation for increased energy costs. We are further developing our policy framework on carbon leakage mitigation, including reviewing our approach to free allocations, following an initial call for evidence in Spring 2021. In the Net Zero Review: Final Report, published on 19 October 2021, the Government outlined analysis of the possible risks of carbon leakage to the UK and a range of possible mitigation options. In the Industrial Decarbonisation Strategy, we committed to develop new proposals for product standards and product labelling and to use public procurement to drive change. This package of measures will support UK industry to thrive as we deliver net zero.